Canadian Underwriter

Economic crime on the rise

November 20, 2009   by Canadian Underwriter

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Fifty-six percent of Canadian companies surveyed report being victims of economic crime with the last year, according to a PricewaterhouseCoopers (PwC) survey.
This is an increase of 10% over the 2003 survey results.
Several economic crimes have come to light in the midst of the past year’s global economic downturn, including large-scale Ponzi schemes in Quebec, Ontario and Alberta — which are currently under investigation — and alleged financial fraud in the government sector, PwC reports.
“From an economic crime perspective, victim organizations said both internal and external fraudsters were the perpetrators, and theft of tangible assets was the most common type of fraud committed (83%),” according to the PwC Investigations & Forensic Services’ Global Economic Crime Survey 2009.
Almost a quarter of Canadian companies that were victims of fraud over the last year estimate their direct fraud-related losses to be greater than US$500,000, according to the survery.
Canadian companies historically have reported higher instances of economic crime than their global counterparts. However, the 2009 results show a widening disparity as 30% of global respondents experienced economic crime, down 13% from 2007.
“Globally, the industries that reported having suffered the most economic crime were communication, insurance, financial services, hospitality and leisure,” according to PwC. “These industries tend to be targeted by fraudsters because of their product or service. Additionally, organizations in these industry sectors tend to have more robust and proactive anti-fraud measures. In effect, they both suffer and detect more fraud than other sectors.”

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